Square Inc. first introduced the Square electronic payments service in early 2010. It allows consumers in the United States to use their iPhone, iPad, iPod touch or Android-based phone to accept credit card charges. The system utilizes an attachment called a "dongle," which is used in unison with a mobile device in order to accept credit card payments.

Even before Visa came along with a healthy investment, Square seemed to be doing well for itself. In a recent statement, Square mentioned that it was processing over $1 million in mobile payments daily. It also closed a $27.5 million round of funding "at a $240 million valuation."

Square became a very attractive choice for consumers after it dropped the 15-cent processing fee for payments this past February. This means that merchants only pay one 2.75 percent fee instead of a percentage fee and an additional fixed cost. This price cut made Square the right choice for small merchants who couldn't pay the expense of fees, and also made Square a worthy competitor of other payment services like Verifone's Payware mobile.

Now, with Visa on its side, Square will likely see a boost from the "single-digit millions" that Visa is investing in the technology.

"We're thrilled to partner with Visa," said Jack Dorsey, CEO of Square. "This relationship will accelerate our vision of empowering businesses and aspiring entrepreneurs to succeed. The best way to grow your business is to accept credit cards. Together, we can ensure that all businesses of any size can pursue the American dream."

Visa is also looking forward to the new partnership, as it represents a new opportunity to compete in the mobile payments market.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA